Canada's Securities Plan C (aka Flaherty's Folly): After Defeat of National Regulator, Failure of Cooperative Federal-Provincial Approach, Harper Settles on Skimmed Down National Securities Regulator

By Keith Edmund White
Editor-in-Chief

There's nothing like talking securities regulation to get the morning juices flowing!

But, then again, seeing as increasingly more Canadians and Americans mood follows market swings (FYI-this is not a good life plan), perhaps it will?

And, anyway, it gives you the opportunity to see just how weird Canada is.

Out of the world's major economies, Canada is the only nation that does not have a federal securities regulator.  Instead, it leaves the regulation of financial trading instruments--whether they be stocks, bonds, the markets they are traded in, or dreaded derivatives--to provinces.

It's a quirk of history and federalism, and one that the Harper government had been assiduously trying to change.  

Harper tasked Canadian Finance Minister Jim Flaherty with creating a national regulator. 

First, Flaherty spent years developing, vetting, and constitutionally scrutinizing a plan for a national securities regulator.

Result:  the Canadian Supreme Court (understandably, in my opinion) torpedoed it.

Then Flaherty then spent a about a year trying to get a joint provincial-federal substitute. 

Well, the verdict's in:  Flaherty's folly is over.

Reuters reports on Canada's Securities Plan C:  Give up; federalize the securities slice they can; move on. 

Canada is pushing ahead with plans to create a new but watered-down version of a national securities regulator as its campaign to create a more powerful watchdog like the U.S. Securities and Exchange Commission appears to be headed toward failure.

The Conservative government's new plan would bypass the country's powerful provinces and focus on detecting market risk, sources familiar with the process told Reuters. This alternative, however, is unlikely to impress investors and the financial industry given its limited powers and the potential for duplication and more bureaucracy, industry officials say.

Ottawa has tried for decades to replace a patchwork of 13 provincial regulators with a single agency more in tune with today's globalized markets, arguing it would reduce costs and give it more clout to deal with the cross-border effects of reforms like the U.S. Volcker Rule.

For background on Canada's unique approach to securities regulation, and the failure Canadian legislation aiming to create an aggressive national regulator, read Securitizing Canadian Federalism:  The Supreme Court of Canada and the Proposed Canadian Securities Reform Act [2011]. 
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BTB 2.0? Stakeholders Crowdsourcing Site Promises Increased Collaboration and New Ideas for BtB and RCC

From BtBObserver, who reports on the new BtB crowdsourcing site Idea Scale: 

Have an idea to make the Canada-U.S. economic and border relationship run smoother? Crossborder stakeholders want to hear your ideas. And they may just shape the work of the Beyond the Border (BtB) Initiative and the Regulatory Cooperation Council (RCC).

Pacific Northwest Economic Region (PNWER), Canadian American Business Council, U.S. Chamber and other US-Canada partnering organizations have launched Idea Scale, a crowdsharing website where crossborder enthusiasts can post and comment on ideas to improve the Canada-U.S. regulatory relationship.

Check out Idea Scale here.  Whether sharing ideas or just monitoring the mystical art of crossborder regulatory transformation, the site is definitely worth regular visits.

Presidents of a Canadian & U.S. Association of CEOs Praise BTB, Offer Roadmap for Further Progress in Canada-U.S. Economic Relations

As noted by Beyond the Border Observer, leaders of two top business associations praise Beyond the Border and suggest steps Canada and the United States can take to improve their economic relationship.

Check out the full The Hill editorial by John Engler and John Manley here. 

 For a quick summary, read below or check out Beyond the Border Observer:

They [Engler & Manley]...stress that “a lot more needs to be done to transform bottlenecks at the border into gateways for the legitimate flow of people and goods.”

On the top of their list? “[S]tronger regulatory cooperation where it makes sense.”

And they also urge both nations “to move beyond pilot projects, feasibility studies, and regulatory reviews to fuller implementation – transforming words and good intentions into more concrete and longer-term action.

Finally, Engler and Manley urge the countries to move forward on important cross-border infrastructure projects, Keystone XL and a new bridge between Windsor and Detroit, and also impose deadlines for parts made in one country and assembled in the other to “travel without interruption… .”

Beyond the Border Meat Pre-clearance Prong Hits a Snag

By Keith Edmund White, Editor-in-Chief

The after-effects of XL Foods E. coli-related beef recall are still being felt, with the Beyond the Border (BTB) pilot pre-clearance for meat shipments between Canada and the United States on ice while the U.S. reviews it's food-safety measures.

And the XL Foods beef recall, which lead to four Canadians getting sick, has given the advocacy group Food & Water Watch powerful ammunition in lobbying against the pilot program.  

The tension is clear:  while easing restrictions at the border saves $100 an hour per driver for Canadian meat shippers, concerns over eliminating U.S. safety inspections for Canadian meat post-XL Foods has frozen this aspect of BTB for the time being.

The XL Foods E. coli outbreak highlighted some very troubling aspects of the Canadian and American meat 'safety net', in both the meat-processing and contamination response consumer protection safeguard systems.  

Perhaps the pause in the pre-clearance program will allow business groups and advocacy groups--like the Food & Water Watch organization--can work together to ensure meat screening systems in both countries are equally robust, ensuring a safe and efficient flow of products throughout Canada and the United States. 

CBC reported yesterday on Food & Water Watch's recent lobbying effort, and resulting Canadian concern over deteriorating U.S. confidence in the Canadian food safety system:

An internal Foreign Affairs memo expressed concern that U.S. "confidence in the Canadian food safety system" could be undermined in the wake of last fall's XL Foods beef recall. 

... 

Josée De Menezes, the department's acting director of the Sanitary and Phytosanitary Measures Division, expressed that concern on Sept. 27 in a widely distributed departmental briefing note obtained under the Access to Information Act by CBC News Network's Power & Politics. 

Specifically, the note refers to a U.S. campaign to halt a meat pre-clearance pilot project that is part of the Canada-U.S. Beyond the Border initiative announced last year by Prime Minister Stephen Harper and U.S. President Barack Obama. 

... 

Tony Corbo, a senior lobbyist for Food & Water Watch's food campaign, said the Sept. 18 letter to the U.S. agriculture secretary, which his group helped write, speaks for itself. 

"I'm not trying to indict Canadian meat as being less safe than U.S. meat," Corbo told CBC News. "But the fact of the matter is we have photographs indicating there was visible fecal contamination on meat products coming into the United States that were inspected at these border inspection stations. And we don't understand why there is an attempt to de-regulate a system that is actually working." 

... 

The Canadian Meat Council is one of several groups that have been pushing for the pilot project to cut delays at the border. 

"The pilot project itself only talks about getting the re-sampling, testing or inspections, getting it away from the border," said James Laws, the council's executive director. 

He said the rest of the shipments not slated for testing will be "pre-cleared" before reaching the border, allowing them get to market sooner. 

A council presentation on the project argues that "redirecting Canadian meat trucks to U.S. inspection centres also wastes time and fuel" and delays drivers from getting back on the road, at a cost of "roughly $100" per hour.

Oil Tanker Regulations and Protecting the Great Lakes: A Gaping and Environmentally Dangerous Regulatory Hole and the Need for Common-Sense, Joint Action to Avoid Oil Spills on the Great Lakes

By Graham Lanz, Staff Writer

The United States, to protect U.S. waters from oil spills, requires oil tankers and other ships with dangerous liquids to be inspected and obtain a Certificate of Compliance. Sounds like smart policy. But the unusual nature of the Great Lakes throws a wrench into this regulatory system. If an oil tanker bound from Venezuela to Nova Scotia entered U.S. territorial waters off Miami, and then remained within sight of land up the entire Eastern seaboard as far as the Northeastern tip of Maine, it would not need a Certificate of Compliance for any portion of its multi-day voyage. However, if that same tanker then departed Halifax and proceeded to Toronto, even a momentary diversion onto the U.S. side of Lake Ontario would trigger the Certificate of Compliance requirement. CUSLI-Nexus staff writer Graham Lanz explores this regulatory gap and its ramifications on U.S. maritime and environmental policies. And, most importantly, he poses a common-sense solution to solve the problem.

If safety regulations are written in blood, as has often been quipped, then a good portion of U.S. environmental law has been written in oil. From the Exxon-Valdez to the BP/Deepwater Horizon disaster, slicks of oil spoiling pristine wilderness areas and smothering marine life strike at the very heart of our collective desire to be better stewards of the environment. Thus, the U.S. has adopted special regulations for vessels that carry oil and other dangerous liquid substances in bulk.[i] To ensure that foreign-flagged oil tankers meet these regulations, the U.S. Coast Guard inspects ships and, when satisfied that the ship is safe, issues (for a fee) a Certificate of Compliance, valid for one year. Oil tankers must possess a Certificate of Compliance in order to “operate on the navigable waters of the United States.”[ii] Thus, foreign flagged vessels navigating the Canadian side of the Great Lakes face noncompliance (and a $25,000 civil penalty) if they stray into U.S. waters without the required certificate.[iii] This is inconsistent with the ideal of freedom of navigation and creates enforcement challenges for the U.S. Coast Guard. This posting examines this problem, whether the requirements for foreign-flagged oil tankers should apply on the Great Lakes for vessels bound for Canadian ports, and proposes some possible solutions to this regulatory inconsistency.

The Certificate of Compliance and the Innocent Passage Exception

The statute requiring a Certificate of Compliance includes an exception for tankers that are “on innocent passage on the navigable waters of the United States.”[iv] This exception is consistent with some of the oldest principles of customary international law. Namely, ships that transit another nation’s territorial sea (generally 12 nautical miles from shore, although some coastal states claim more) en route from the high seas or another state’s waters, bound to the high seas or another state’s waters are to be granted the right of innocent passage.[v] That is, provided the vessel is acting innocently (e.g. not breaching the peace, not actively fishing in violation of fisheries law, not marauding as pirates) the coastal state is expected to leave it alone and allow it to pass through unmolested. This promotes efficiency and safety, allowing vessels to plot the shortest course from Port A to Port B and encouraging them to stay within reach of land-based rescue in the event of emergency, all without fear of being hassled by coastal state authorities. Particularly as the international patchwork of regulatory regimes has become more complex, innocent passage has become more necessary to the shipping industry. If it were not for its innocent passage exception, the requirement for a Certificate of Compliance would essentially function as a toll for use of the U.S. territorial sea for oil tankers not intending to call on a U.S. port or conduct oil transfers in U.S. waters.

Yet innocent passage is not recognized in a nation’s internal waters.[vi] Therein, a state is free to exclude vessels and exercise a much greater degree of authority over foreign vessels. Internal waters are:

wholly or largely surrounded by a state’s land territory as well as sea waters on the landward side of the baseline of the territorial sea or of the archipelagic waters.1 "Internal waters" include waters of lakes, rivers, and bays that are on the landward side of the baseline of the territorial sea or of archipelagic waters. For rivers, this baseline is a straight line across the mouth of the river between points on the low-tide line of its banks.[vii]

Nations are permitted to assert exclusive jurisdiction over their internal waters.

The Great Lakes: A Legally Distinct, Bi-National Group of Internal Waters

The Great Lakes of North America are an exceptionally unusual body of water: They are bi-national internal waters.[viii] The Boundary Waters Treaty of 1909 established that each nation intended to exert full authority over the waters on it side of the international border, while still maintaining freedom of navigation across the Great Lakes collectively (including Lake Michigan, which is the only Great Lake exclusively within the United States).[ix] The alternative would have been for each nation to assert its 12 mile territorial sea, with “high seas” in the waters between on those portions of the lakes greater than 24 miles wide. This unappealing option would have created a number of unconnected, nearly lawless frontiers of varying sizes between two civilized allies, opening the door for unscrupulous vessels of third party nations to thumb their noses at the U.S. and Canada nearly within sight of both shores.

A ship traversing the Great Lakes will typically cross the Canada-U.S. border dozens of times. Thus, vessels entering the Great Lakes from the St. Lawrence Seaway are merely a slight rudder angle change from switching which nation’s exclusive jurisdiction they are under. It would be as if a ship was instantaneously teleported from a mooring in Rotterdam’s enclosed harbor to a berth in Mumbai, without the benefit of “easing into” a possibly different regulatory environment after crossing the high seas. Thankfully (both for ships and shipping regulators) the regulations enforced by the U.S. Coast Guard and Transport Canada are highly congruent. However, the U.S. requirement for the Certificate of Compliance is one significant difference.

Why The Liquid Bulk Dangerous Cargoes Regulatory Gap Matters

If an oil tanker bound from Venezuela to Nova Scotia entered U.S. territorial waters off Miami, and then remained within sight of land up the entire Eastern seaboard as far as the Northeastern tip of Maine, it would not need a Certificate of Compliance for any portion of its multi-day voyage. However, if that same tanker then departed Halifax and proceeded to Toronto, even a momentary diversion onto the U.S. side of Lake Ontario would trigger the Certificate of Compliance requirement.[x] In both instances the vessels are bound from one foreign (non-U.S.) port to another. In neither instance is the vessel calling on a U.S. port or conducting oil transfer operations while in U.S. waters. During one leg of the voyage the tanker just happens to be passing (“innocently,” one might even say) through U.S. internal waters.

On its face, this seems unjust and inefficient. It also seems to contravene the spirit of free navigation embodied in the Boundary Waters Treaty. Further, it presents an enforcement burden for the U.S. Coast Guard, which will not have the opportunity to board this vessel in a U.S. port to examine whether it possesses a valid Certificate of Compliance, but is still expected to enforce the law and protect the marine environment.[xi]

Solutions to the Regulatory Gap

Some common sense solutions are available. The simplest, cheapest fix would be to amend the text of 46 U.S.C. § 3702 (e) to reflect the spirit of the Boundary Waters Treaty by adding to the innocent passage exception “or vessels navigating U.S. internal waters of the Great Lakes solely for the purpose of calling on Canadian ports.” However, this approach of broadening an exception would create an apparent acceptance of risk to the environment that may be politically unappealing to the constituencies who rely on the Great Lakes for fishing, drinking water, and recreation.

A better solution would be to issue Certificates of Compliance to all oil tankers entering the Great Lakes during a regulatory inspection they are already required to undergo, such as their joint U.S./Canadian ballast water examination,[xii] or the St. Lawrence Seaway Development Corporation’s enhanced seaway inspection.[xiii] This latter solution would require some further coordination between the U.S. Coast Guard and its Transport Canada and St. Lawrence Seaway Development Corporation partners in order to facilitate the presence of a qualified U.S. Coast Guard marine inspector, as well as submission of an application and payment of a fee by the ship’s management.[xiv] This approach would require only a modest investment and would be consistent with previous proposals that the U.S. Coast Guard establish a permanent presence in Montreal to facilitate this sort of pre-Great Lakes inspection activity at a choke point in the system where ships are already stopped.[xv] Canadian tankers that navigate solely on the Great Lakes could be examined annually and given a Certificate of Compliance, much in the same manner that the U.S. Coast Guard annually examines Canadian bulk cargo vessels on the Great Lakes.

Why Potential Great Lakes Oil Drilling Makes Solving the Compliance Certificate Regulatory Gap Not Merely Abstract Legal Untidiness, But a Significant Regulatory Hurdle

One potential development that might alter the landscape is the renewed interest in oil drilling on the Great Lakes.[xvi] While the BP/Deepwater Horizon catastrophe has certainly dampened enthusiasm for new underwater drilling, powerful energy lobbies have had recent success in tapping into the vast oil and natural gas deposits under the Great Lakes region from land-based wells, and Ontario continues to permit operation of extraction wells in their provincial waters.[xvii] Facing rising energy prices and continued struggles to replace their historical industrial base, the states and provinces of the Great Lakes may find the allure of underwater oil and gas tempting enough to reverse their previous stance against drilling beneath the world’s largest source of fresh surface water. That would certainly draw more tankers (and attention) to the Great Lakes.

If there is any doubt a tanker could be involved in a disaster on the Great Lakes, we need look no further back than September 16, 1990 (more recent than the Exxon-Valdez) when the oil tanker Jupiter exploded while unloading gasoline in the Saginaw River.[xviii] Due to the cargo’s high flammability, the damage to the marine environment turned out to be minimal, but the episode illustrates the need for regulatory agencies on both sides of the Great Lakes to be vigilant regarding tanker safety. An important pre-requisite to effective oversight in any regulatory context is absolute clarity about what the rules are. Clarifying the applicability of the Certificate of Compliance requirements for vessels calling on Canadian Great Lakes ports is a necessary step. If the requirement is determined to apply, as it appears it should, the U.S. Coast Guard must work with its partners in Canada and the shipping industry to ensure compliance with it. Conducting a Certificate of Compliance exam in conjunction with other inspection activities, either in Montreal or in the St. Lawrence Seaway, seems to be the optimal solution.

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[i] Generally 46 U.S.C. § 3701 et seq.

[ii] 46 U.S.C. § 3711 (a)

[iii] 46 U.S.C. § 3718 (a) (1)

[iv] 46 U.S.C. § 3702 (e)

[v] Convention on the Territorial Sea and the Contiguous Zone, Apr. 29, 1958, art. 14, 15 U.S.T. 1606.

[vi] U.S. v. Louisiana, 470 U.S. 93, 113 (1985).  Another regulation enforced by the U.S. Coast Guard (33 C.F.R. § 151.2020) explicitly defines innocent passage as excluding vessels “bound for, entering or departing a U.S. port, or navigating the internal waters of the U.S.”

[vii] 44B Am. Jur. 2d International Law § 82

[viii] Id. Most of the conventions of the International Maritime Organization (IMO), such as the Safety of Life at Sea Convention (SOLAS), contain exemptions for ships that navigate solely on the Great Lakes, reflecting its unique nature.

[ix] Boundary Waters Treaty, Jan. 11, 1909, U.S.- Can. Available at http://www.ijc.org/rel/agree/water.html#text

[x] A recent search of a commercially available ship tracking site (http://ais.boatnerd.com/) revealed at least five tankers navigating on the Great Lakes, only one of which was on the U.S. side of the border. Search conducted on September 26, 2012.

[xi] Database inquiries and tracking technologies can establish these violations with relative ease, but before enforcement action can be taken (if desirable) the vessel can already have “escaped” back into Canadian internal waters.

[xii] See http://www.uscgnews.com/external/content/document/4007/1444375/1/Document.pdf

[xiii] See 33 C.F.R. § 401.

[xiv] Shipping companies might chafe at paying a fee they have not had to pay in the past, particularly since this approach does not remedy the apparent injustice of there being no innocent passage on the Great Lakes. A compromise might be a reduced fee.

[xv] U.S. Coast Guard personnel based in Rotterdam, Netherlands, Yakota, Japan, and Singapore conduct this sort of inspection regularly for oil tankers bound for the United States.  See the summarized concluding remarks Rear Admiral Michael N. Parks, U.S. Coast Guard at the 2012 CUSLI Conference, available at http://www.cuslinexus.com/2012/03/cusli-2012-conference-concluding.html

[xvi] For a detailed discussion see Professor Hall’s analysis at http://www.greatlakeslaw.org/files/hall_bcealr_article.pdf

[xvii] Id.

[xviii] NOAA’s National Ocean Service Office of Response and Restoration, http://www.incidentnews.gov/incident/6755.  See also National Transportation Safety Board memorandum to Michigan Gov. James Blanchard dated December 3, 1991, available at http://www.ntsb.gov/doclib/recletters/1991/M91_44.pdf

Woodrow Wilson Center Talks Shale Gas With Jim Slutz

Jim Slutz, president and managing director of Global Energy Strategies LLC, talks on American shale gas production in this informative interview with Lynann Butkiewcz.

Some highlights:

• America has tons of natural gas. "[America's] natural-gas resource base, which includes proven and unproven reserves, is now estimated at 2203.0 TCF, or almost 90 years of supply."

•  Shale gas will soon be leading source of U.S. natural gas.  "EIA (Energy Information Administration) projects that from 2010 to 2035, natural gas production from shale formations will rise from 23% to 49% of the U.S. gas supply. The term “game-changer” is often used and is very appropriate for this development." 

• FTAs and U.S. regulation of natural gas exports.  The Department of Energy (DOE) authorizes natural gas exporters, using a two-tiered process.  For countries that America has free-trade agreements (FTAs), the export automatically considered in the public interest and, once all regulatory steps are taken,  DOE authorization is granted.  But for those nations with FTAs, a more complicated process follows.  In short, America's trade relations and review process has a direct impact on American natural gas exporters.  Learn more about DOE's natural gas regulation, which is governed by the Natural Gas Act of 1938.  Finally, check out Michael Levi's discussion paper, A Strategy for U.S. Natural Gas Exports, a publication of the Brookings Institute's Hamilton Center.  The paper reviews U.S. gas regulation, and puts forward a trade strategy for the U.S. to push for global market-based pricing and transparency.

• America and Canada's energy relationship--and Canadian pipeline concerns.  "The United States can be a partner to Canada as a market for additional crude oil from the oil sands. The only restriction is the need for added pipeline capacity. The United States has extra capacity in oil refineries, which are specifically designed to process heavy oil, so it makes economic sense to ship more oil to the United States. The regulatory delays by the U.S. government regarding the Keystone XL pipeline are directly responsible for Canada’s increased urgency in seeking oil-export opportunities in Asia. This has also raised concerns by Canadians about whether Canada is overly reliant on the United States as a trading partner."

• Challenges to exporting natural gas to Asia:  Asia's long-term gas lock & oil-pricing pegs. America's short-term contracts put barriers to exporting cheaper U.S. natural gas to Asia. 

"It will be a long time before a global gas market develops. While there may be movement in that direction, challenges exist to the development of a U.S.-style, Henry Hub–type market. Gas markets in Asia and the United States function quite differently. In Asia, much of the gas supply depends on LNG, which requires huge upfront investment and therefore is predicated on long-term contracts, typically twenty years. These contracts use oil prices as a basis for determining gas value. In the United States, gas is traded independently of oil price and on a much shorter-term basis. A typical contract in the United States is measured in months, not years. Long-term contracts will remain a key component of LNG project development because of the financing required to undertake the infrastructure construction. The other important component of pricing is to remember is that there is a significant cost to liquefy and transport LNG, in most cases more than the cost of the gas. Therefore, just because there is a current significant differential between U.S. and Asia prices does not automatically mean that exporting gas to Asia will be economically attractive for the long term." 

2012 CUSLI Conference: Morning Panel 2 -- Harmonizing the Border: Increase Jobs by Harmonizing Regulations

by Keith Edmund White

This panel was a round-table discussing regulatory harmonization efforts between the two countries. 

• Moderator/Questioner:  David R. Kocan, Managing Director, Canada-U.S. Law Institute
• Laura Dawson, PhD, Dawson Strategic
• Kelly Johnston, In House Counsel, Campbell’s Soup
• Chris Sands, Senior Fellow, Hudson Institute

Key Themes:

(1)  Regulatory differences matter.  There are clear regulatory differences between our countries that impend cooperation.  Laura Dawson, by showing her Canadian phone and American phone, show that each countries' different standards lead to different types of phones being common in each country.  And with the impressive roaming charges that apply from a call from Detroit to Windsor, but not L.A. to D.C., we're dealing with a regulatory system that keeping false barriers between us.  Another example, that a worker had to have a separate boot requirements on each side of the border (and this was a private sector regulation).

(2)  Regulators aren't the problem.  Kelly Johnston, admittedly some listeners might be surprised, that regulators are actually working to push cooperation.

(3)  There are bad regulations we'll have to deal with.  We need to (a) implement risk management in both countries' regulatory systems and (b) have this operate in a time of small, leaner government.  Chris Sands pointed out that, particularly in America, many of our regulations are built on unrealistic expectations of safety.

(4)  Will the U.S. keep focusing on the few outstanding issues, and what about Mexico?  Regulatory alignment with the United States is something Canada has to do.  Most of our exports still go to Canada, and therefore Canada is definitely.  90% of our standards are aligned.  But how long will the United States focus on Canada on the remaining issues, especially since other trade-relationships aren't as attention-grabbing.  And Chris Sands points out that America needs to ensure Canada has a voice in the harmonizing regulatory systems.  And, as Dawson added, the U.S.-Mexico regulatory harmonization effort and the U.S.-Canada regulatory harmonization are now on separate tracks.  This raises an important question:  is doing a bilateral harmonization efforts really the best way forward?  And even if it isn't, are we stuck with it?

(5)  Canada and the United States need to scrap bad regulations.  With U.S. and Canada already hosting some of the world's highest labor costs, Johnston and Dawnson emphasized the need for duplicative and excessive regulations to be change.  If not, the United States and Canada will continue to see lower-cost manufacturers (re: China, India, etc.) "eating our lunch", and that isn't going to help either country economic welfare.

(6)  Is self-regulation the way forward?  Johnston pointed out that often the government often comes to the private sector to figure out standards on their own.  But Dawson pointed out that if we want to lean on the private sector--which in an area of budget cuts and wanting to get the most knowledgeable people making smart regulations--we need to work on creating U.S.-Canada forums to do self-regulations across the border.  And Chris Sands pointed out that the private sector is incentived to push for global standards that help them sell their goods quickly, and--often--will work faster to get theses standards finalized and operationalized.

And one last issue:  environmental sustainability?  The government isn't doing virtually anything on this issue in the United States.  But guess what, Johnston asked, Walmart is doing more for sustainability by asking questions of the manufacturers who wish to sell their goods in Walmart.

(7)  What's needed:  Common framework for regulators to communicate, which then should bring in interested parties.  The problem, Johnston pointed out, is that Canada and the United States regulators rely to much on ad  hoc cooperation, which by its nature can only bring limited success.  But Chris Sands pointed out that formalizing such a process requires bringing in the courts and Congress.  But regarding Congress, more so than Parliament, there's always the risk of interest groups hijacking the process.  And we also need to change the administrative procedure act to allow Canadian companies to have a voice through regulations so that their voice is heard, and the Courts are defending the 'fairness' interests of both Canadian and American businesses impacted by regulations.

(8)  What's the impact of the emerging EU-Canadian free trade deal?  Johnston pointed out that there are important impacts, such as location markers that for example would not allow Kraft cheese to have 'Parmesan' cheese.  But as Johnston added, what does this matter if America can't compete with European goods in Canada?